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Alibaba Group Holding Limited (BABA - Free Report) reported first-quarter fiscal 2024 non-GAAP earnings of $2.40 per ADS (RMB 17.37), which surpassed the Zacks Consensus Estimate by 21.8%. The figure increased 48% from the year-ago quarter’s reported figure in RMB terms.
Revenues of RMB 234.16 billion ($32.3 billion) rose 14% from the year-ago fiscal quarter’s level. Further, the top line beat the Zacks Consensus Estimate of $30.8 billion.
The top-line increase was driven by solid momentum across China commerce retail business and International commerce retail business. Strength across the local services and Cainiao logistics services and cloud business also contributed well.
In the reported quarter, the company reorganized its operations into six major business groups - Taobao and Tmall Group, Alibaba International Digital Commerce Group, Local Services Group, Cainiao Smart Logistics Network, Cloud Intelligence Group and Digital Media and Entertainment Group.
Alibaba has returned 12.6% in the year-to-date period, underperforming the industry’s growth of 43.6%.
Alibaba Group Holding Limited Price, Consensus and EPS Surprise
Taobao and Tmall Group (49.1% of total revenues): The segment comprises Taobao, Tmall, Xianyu, 1688.com and other businesses operating in China’s retail and wholesale markets. Alibaba generated RMB 114.95 billion ($15.8 billion) of revenues from the segment, which grew 12% from the year-ago fiscal quarter’s reported figure.
China commerce retail (46.9% of total revenues): The business vertical’s revenues for the reported quarter were RMB 109.8 billion ($15.14 billion), reflecting a 13% rise from the year-ago fiscal quarter’s reported number. The growth was attributed to the strength in customer management revenues owing to rising online physical goods GMV at Taobao and Tmall and increasing merchant spending on advertisement. Strong sales in the consumer electronics category contributed well to direct sales and other revenues.
China commerce wholesale (2.2% of total revenues): The business generated revenues of RMB 5.1 billion ($7.7 million), which grew by 1% on a year-over-year basis.
Alibaba International Digital Commerce Group (9.4% of total revenues): The segment comprises Lazada, AliExpress, Trendyol, Alibaba.com and other businesses operating in the international retail and wholesale markets. Alibaba generated RMB 22.1 billion ($3.05 billion) in revenues from the segment, which grew 41% from the year-ago fiscal quarter’s reported figure.
International commerce retail (7.3% of total revenues): Revenues for the reported quarter were RMB 17.14 billion ($2.4 billion), up 60% from the year-ago fiscal quarter’s reported figure, owing to solid combined order growth in retail businesses.
International commerce wholesale (2.1% of total revenues): The business generated revenues of RMB 4.98 billion ($687 million), which increased by 0.1% on a year-over-year basis.
Local Services Group (6.2% of total revenues): Revenues grossed RMB 14.45 billion ($1.99 billion), up 30% from the year-ago fiscal quarter’s reported figure. The rise was driven by the strong GMV growth of Ele.me and the order growth of Amap.
Cainiao Smart Logistics Network (9.9% of total revenues): Revenues summed up to RMB 23.2 billion ($3.2 billion), up 34% from the year-ago fiscal quarter’s reported figure. The upside was led by strong momentum across domestic consumer logistics services and international fulfillment solution services.
Cloud Intelligence Group (10.7% of total revenues): The segment generated revenues of RMB 25.12 billion ($3.5 billion), up 4% from the year-ago fiscal quarter’s reading. This was attributed to strength among customers in the financial services, education, electric power and automobile industries. Alibaba’s consolidated businesses also contributed well.
Digital Media and Entertainment Group (2.3% of total revenues): Revenues logged RMB 5.4 billion ($742 million), increasing 36% from the year-ago fiscal quarter’s reported figure. This was driven by strength in the online entertainment business and the improving offline entertainment business.
All Others (19.4% of total revenues) revenues were RMB 45.5 billion ($6.3 billion), up 1% from the year-ago fiscal quarter’s reported figure. Strength across Alibaba Health, Fliggy, Freshippo and Intelligent Information Platform contributed well.
Operating Details
In the fiscal first quarter, sales and marketing expenses were RMB 27.05 billion ($3.7 billion), up 5.7% from the year-ago fiscal quarter’s reported figure. As a percentage of total revenues, the figure remained flat year over year at 12%.
General and administrative expenses were RMB 7.3 billion ($1.01 billion), down 13.5% from the year-ago fiscal quarter’s level. As a percentage of total revenues, the figure contracted by 100 basis points (bps) from the prior-year fiscal quarter’s reading.
Product development expenses were RMB 10.5 billion ($2.02 billion), down 26.3% from the year-ago fiscal quarter’s reported figure. As a percentage of total revenues, the figure contracted by 300 bps year over year.
The operating income was RMB 42.5 billion ($5.9 billion) in the reported quarter, up 70% year over year. The operating margin was 18.1% in the fiscal first quarter, expanding 600 bps from the year-ago quarter.
Adjusted EBITDA increased by 27% from the year-ago fiscal quarter’s reported figure to RMB 52.05 billion ($7.2 billion).
Balance Sheet & Cash Flow
As of Jun 30, 2023, cash and cash equivalents were $31.2 billion (RMB 226.4 billion), up from $28.12 billion (RMB 193.1 billion) as of Mar 31, 2023.
Short-term investments totaled $39.16 billion (RMB 283.95 billion) at the end of first-quarter fiscal 2024, down from $47.5 billion (RMB 326.5 billion) at the end of fourth-quarter fiscal 2023.
Alibaba generated $6.25 billion (RMB 45.3 billion) in cash from operations in the reported quarter, up from $4.6 billion (RMB 31.4 billion) in the previous fiscal quarter.
BABA’s free cash flow was $5.4 billion or RMB 39.1 billion.
Some other top-ranked stocks in the retail-wholesale sector are Walmart (WMT - Free Report) , Ulta Beauty (ULTA - Free Report) and Rush Enterprises (RUSHA - Free Report) , currently carrying a Zacks Rank #2.
Walmart has gained 14.3% on a year-to-date basis. The long-term earnings growth rate for WMT is currently projected at 5.5%.
Ulta Beauty has lost 4.6% on a year-to-date basis. The long-term earnings growth rate for ULTA is currently projected at 9.7%.
Rush Enterprises has gained 22% on a year-to-date basis. The long-term earnings growth rate for RUSHA is currently projected at 15%.
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Alibaba (BABA) Q1 Earnings & Revenues Beat Estimates, Rise Y/Y
Alibaba Group Holding Limited (BABA - Free Report) reported first-quarter fiscal 2024 non-GAAP earnings of $2.40 per ADS (RMB 17.37), which surpassed the Zacks Consensus Estimate by 21.8%. The figure increased 48% from the year-ago quarter’s reported figure in RMB terms.
Revenues of RMB 234.16 billion ($32.3 billion) rose 14% from the year-ago fiscal quarter’s level. Further, the top line beat the Zacks Consensus Estimate of $30.8 billion.
The top-line increase was driven by solid momentum across China commerce retail business and International commerce retail business. Strength across the local services and Cainiao logistics services and cloud business also contributed well.
In the reported quarter, the company reorganized its operations into six major business groups - Taobao and Tmall Group, Alibaba International Digital Commerce Group, Local Services Group, Cainiao Smart Logistics Network, Cloud Intelligence Group and Digital Media and Entertainment Group.
Alibaba has returned 12.6% in the year-to-date period, underperforming the industry’s growth of 43.6%.
Alibaba Group Holding Limited Price, Consensus and EPS Surprise
Alibaba Group Holding Limited price-consensus-eps-surprise-chart | Alibaba Group Holding Limited Quote
Revenues by Segments
Taobao and Tmall Group (49.1% of total revenues): The segment comprises Taobao, Tmall, Xianyu, 1688.com and other businesses operating in China’s retail and wholesale markets. Alibaba generated RMB 114.95 billion ($15.8 billion) of revenues from the segment, which grew 12% from the year-ago fiscal quarter’s reported figure.
China commerce retail (46.9% of total revenues): The business vertical’s revenues for the reported quarter were RMB 109.8 billion ($15.14 billion), reflecting a 13% rise from the year-ago fiscal quarter’s reported number. The growth was attributed to the strength in customer management revenues owing to rising online physical goods GMV at Taobao and Tmall and increasing merchant spending on advertisement. Strong sales in the consumer electronics category contributed well to direct sales and other revenues.
China commerce wholesale (2.2% of total revenues): The business generated revenues of RMB 5.1 billion ($7.7 million), which grew by 1% on a year-over-year basis.
Alibaba International Digital Commerce Group (9.4% of total revenues): The segment comprises Lazada, AliExpress, Trendyol, Alibaba.com and other businesses operating in the international retail and wholesale markets. Alibaba generated RMB 22.1 billion ($3.05 billion) in revenues from the segment, which grew 41% from the year-ago fiscal quarter’s reported figure.
International commerce retail (7.3% of total revenues): Revenues for the reported quarter were RMB 17.14 billion ($2.4 billion), up 60% from the year-ago fiscal quarter’s reported figure, owing to solid combined order growth in retail businesses.
International commerce wholesale (2.1% of total revenues): The business generated revenues of RMB 4.98 billion ($687 million), which increased by 0.1% on a year-over-year basis.
Local Services Group (6.2% of total revenues): Revenues grossed RMB 14.45 billion ($1.99 billion), up 30% from the year-ago fiscal quarter’s reported figure. The rise was driven by the strong GMV growth of Ele.me and the order growth of Amap.
Cainiao Smart Logistics Network (9.9% of total revenues): Revenues summed up to RMB 23.2 billion ($3.2 billion), up 34% from the year-ago fiscal quarter’s reported figure. The upside was led by strong momentum across domestic consumer logistics services and international fulfillment solution services.
Cloud Intelligence Group (10.7% of total revenues): The segment generated revenues of RMB 25.12 billion ($3.5 billion), up 4% from the year-ago fiscal quarter’s reading. This was attributed to strength among customers in the financial services, education, electric power and automobile industries. Alibaba’s consolidated businesses also contributed well.
Digital Media and Entertainment Group (2.3% of total revenues): Revenues logged RMB 5.4 billion ($742 million), increasing 36% from the year-ago fiscal quarter’s reported figure. This was driven by strength in the online entertainment business and the improving offline entertainment business.
All Others (19.4% of total revenues) revenues were RMB 45.5 billion ($6.3 billion), up 1% from the year-ago fiscal quarter’s reported figure. Strength across Alibaba Health, Fliggy, Freshippo and Intelligent Information Platform contributed well.
Operating Details
In the fiscal first quarter, sales and marketing expenses were RMB 27.05 billion ($3.7 billion), up 5.7% from the year-ago fiscal quarter’s reported figure. As a percentage of total revenues, the figure remained flat year over year at 12%.
General and administrative expenses were RMB 7.3 billion ($1.01 billion), down 13.5% from the year-ago fiscal quarter’s level. As a percentage of total revenues, the figure contracted by 100 basis points (bps) from the prior-year fiscal quarter’s reading.
Product development expenses were RMB 10.5 billion ($2.02 billion), down 26.3% from the year-ago fiscal quarter’s reported figure. As a percentage of total revenues, the figure contracted by 300 bps year over year.
The operating income was RMB 42.5 billion ($5.9 billion) in the reported quarter, up 70% year over year. The operating margin was 18.1% in the fiscal first quarter, expanding 600 bps from the year-ago quarter.
Adjusted EBITDA increased by 27% from the year-ago fiscal quarter’s reported figure to RMB 52.05 billion ($7.2 billion).
Balance Sheet & Cash Flow
As of Jun 30, 2023, cash and cash equivalents were $31.2 billion (RMB 226.4 billion), up from $28.12 billion (RMB 193.1 billion) as of Mar 31, 2023.
Short-term investments totaled $39.16 billion (RMB 283.95 billion) at the end of first-quarter fiscal 2024, down from $47.5 billion (RMB 326.5 billion) at the end of fourth-quarter fiscal 2023.
Alibaba generated $6.25 billion (RMB 45.3 billion) in cash from operations in the reported quarter, up from $4.6 billion (RMB 31.4 billion) in the previous fiscal quarter.
BABA’s free cash flow was $5.4 billion or RMB 39.1 billion.
Zacks Rank & Other Stocks to Consider
Currently, Alibaba carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some other top-ranked stocks in the retail-wholesale sector are Walmart (WMT - Free Report) , Ulta Beauty (ULTA - Free Report) and Rush Enterprises (RUSHA - Free Report) , currently carrying a Zacks Rank #2.
Walmart has gained 14.3% on a year-to-date basis. The long-term earnings growth rate for WMT is currently projected at 5.5%.
Ulta Beauty has lost 4.6% on a year-to-date basis. The long-term earnings growth rate for ULTA is currently projected at 9.7%.
Rush Enterprises has gained 22% on a year-to-date basis. The long-term earnings growth rate for RUSHA is currently projected at 15%.